Flock up?

Market Morsel

The release of the ABS quarterly sheep & lamb slaughter data last week allows us to get our first picture of the sheep turnoff ratio (STR) for 2023. During 2022 the STR averaged 9.2%, well below the 14% threshold that signals if the flock is in rebuild or liquidation phase. An STR at 9.2% is exceptionally low, and apart from the 9.1% seen in 2021 it is the lowest STR recorded in three decades.

The very low STR demonstrates a keen enthusiasm for sheep producers to rebuild their flock and this has translated into some strong annual gains to the national flock over the last few years (circa 7%-10% growth). The STR for the first quarter of 2023 has begun to climb, moving to an average of 10.1% so far this year.

An STR of 10.1% shows we are still firmly in flock rebuild territory. A scatter plot of the annual average STR to the annual change in the flock shows that an STR of around 10% would infer an increase to the flock of around 6.0% during 2023 (based on the line of best fit). Currently, MLA forecasts are for the flock to lift by 3.6% this year, so if the STR stays around 10% for much of 2023 we may begin to see some upward revisions to the flock growth projections as the year progresses.